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Governmental Liability: Notice of Claim

Posted by Ted A. Schmidt | Jul 18, 2022 | 0 Comments

James v. City of Peoria, No. CV-21-0125-PR (July 18, 2022) (J.King)

Plaintiffs' 12 year old son was hit by a vehicle walking home from school. Plaintiff served a Notice of Claim [NOC] pursuant to A.R.S. § 12-821.01, upon defendant City of Peoria offering to settle her claim for $10,071,016.72 with a thirty day deadline on the offer. The NOC statute requires an offer to settle in a NOC remain open for 60 days. The trial court granted the City summary judgment finding the thirty day deadline violated the statute rendering the NOC ineffective and because the 180 day deadline to file the NOC had already run, the case was dismissed with prejudice. The Arizona Court of Appeals affirmed. The Arizona Supreme Court reversed the trial court and vacated the court of appeals decision.

A valid NOC must;
a) be filed with the person in the government authorized to accept service
b) within 180 days,
c) contain sufficient facts for government to understand liability and damages,
d) offer to settle for a specific amount.

While all of the requirements of a NOC set forth in the statute must be met or the NOC fails, there is no requirement in the statute that the settlement offer made in the NOC be kept open for any particular length of time. The only time requirement applicable to the claimant making a NOC is the requirement it be filed within 180 days of the cause of action accruing. A.R.S. § 12-821.01(E) does give the government 60 days to respond to a NOC and if it fails to respond, the NOC is deemed denied as an operation of law. This creates a deadline for the public entity.

Accordingly, placing a time limit to respond to a settlement offer which is less than the 60 days required by the NOC statute is a nullity but does not invalidate the NOC. Here plaintiffs' NOC met all the requirements of A.R.S. § 12-821.01 and the City had 60 days to respond to the $10,071,016.72 settlement offer despite the expressed 30 day deadline.

Drew v. Prescott Unified School District, 233 Ariz. 522, 526 (App. 2013) is overruled.

About the Author

Ted A. Schmidt

Ted's early career as a trial attorney began on the other side of the fence, in the offices of a major insurance defense firm. It was there that Ted acquired the experience, the skills and the special insight into defense strategy that have served him so well in the field of personal injury law. Notable among his successful verdicts was the landmark Sparks vs. Republic National Life Insurance Company case, a $4.5 million award to Ted's client. To this day, it is the defining case for insurance bad faith, and yet it is only one of several other multi-million dollar jury judgments won by Ted during his career. He is certified by the State Bar of Arizona as a specialist in "wrongful death and bodily injury litigation".


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